Fracking our way to Mideast peace

“Low oil prices have so eroded Arab states’ power, they now see Israel as a protector.” (Walter Russell Mead in The Wall Street Journal,Tuesday, December 12, 2017)

“Whatever you think of President Trump’s decision to recognize Jerusalem as Israel’s capital, it points to the most important strategic reality in the Middle East: Arab power has collapsed in the face of low oil prices and competition from American frackers.

The devastating oil-price shocks of the 1970s, orchestrated by the Organization of the Petroleum Exporting Countries, nearly wrecked the world economy.Ever since, the U.S. has looked for ways to break OPEC’s parasitic and rent-seeking grip on the oil market – and thereby reduce America’s geopolitical vulnerability to events in the Middle East.”

Mead continues: “Victory did not come easily.Intense conservation efforts made the U.S.much more energy-efficient.New oil discoveries in Africa and elsewhere significantly broadened the available supply. Renewable energy sources added to the diversification.But the most decisive development was that decades of public and private research and investment unleashed an American oil-and-gas boom, leading to a revolution in energy markets that has sent geopolitical shocks through world affairs.

The consequences reverberate in the Middle East and beyond.Future oil revenues to countries like Saudi Arabia, Iran, Venezuela, Russia and Iraq will fall trillions of dollars short of what once might have been expected.The shift in energy markets will benefit consumer economies like Japan, China, India and the nations of the European Union.The U.S. and similarly situated nations , like Australia and Canada, can look forward to faster growth, since they will capture much of the oil revenue that Russia and OPEC lose.

But the greatest consequences are being felt in the Arab world, where the long-term decline in oil revenues threatens the stability of many states.

There’s more.The staggering affluence of the Gulf countries during the OPEC era concealed the Arab world’s failure to develop states and economies capable of competing effectively in the 21st century.As their dream of revival through riches fades, they are waking to a new era of weakness and dependency.

The Gulf States increasingly see Israel not as an insect to be crushed by resurgent Arab power, but as a lion that can defend them from Iran. Syria, once a citadel of Arab nationalism, now haplessly hosts Russian, American, Iranian and Turkish forces that the Assad dynasty can neither control nor evict.”

More from the Journal Columnist:“Arab diplomats, lobbyists and financiers must brace for more bad news:As the declining long-term prospects of theOPEC states become apparent, their diplomatic and economic influence across the West can be expected to wane even further.

Many analysts look at the frustrations of America’s policy in the Middle Eastand conclude that the U.S. is in retreat.That misses the deeper truth.American diplomacy has had its share of failures, but the region is now being fundamentally reshapedby drillers in Texas, Pennsylvania, North Dakota and elsewhere.”

Mead Concluding, positively:Even with OPEC’s hold broken, the Middle East will remain a problem for American policy.Moreover, not all the consequencesof OPEC’s decline are good.In the short term, Russia and Iran are likely to double down on adventurous foreign policies as a way of distracting their populations from the tough challenges ahead.Instability in America’s key Gulf allies and in Egypt could create major headaches for the U.S.

Nevertheless, reducing OPEC’s ability to capture rents, while forcing more corrupt petrostate oligarchies to contemplate reform, is likely over time to reduce both the costs and the risks of American foreign policy.This is what winning looks like.”

Mr. Mead is a fellow at the Hudson Institute and a professor of foreign affairs t Bard College.